Is a Computer Tax Deductible For Small Business?

Is a Computer Tax Deductible For Small Business? Answered Here

Are you getting ready to prepare the accounts for your company and need to know is a computer tax deductible for small business?

We will give you a quick answer in this article and explain more about the background of writing off a computer for tax purposes.


Computer Tax Write Off For Self Employed

To answer the question, ‘Is a computer tax deductible for small business?’, yes if you are self employed and filing your tax return you can claim back the cost of your laptop or computer for work purposes.

Generally, self employed business owners have 1 – 5 computers each costing around 1,000 USD so you can itemize these expenses and pass it on to your accountant at tax season.


Does JCPenney Sell Laptop Computers?

With the holiday season fast approaching, successful retailers will be in control of their inventory.

They know exactly what will sell and how much they need to stock.

They also know the holiday season is a perfect time to get rid of slow or non selling inventory throughout the process of write downs.

C.Penney lately used this strategy the extreme write down to bring clients in their stores.

Their hope was to clear out old goods and avoid writing off millions of dollars in non selling inventory.

Likewise, you may be looking on Amazon to purchase a new laptop or computer to do your work.


Write Off Laptop For Work

It’s easier to understand how this works by looking at a larger company as an example.

If clients were enticed through Penneys doors by substantial write downs, those clients were more prone to buy other items.

Penneys pre holiday strategy started long before Black Friday and left other retailers behind.

Holding stock for far too long increases your chance the market price for the item going down below what you actually paid for it.

The item itself is not without value, however, if clients do not want the item, you might be forced to write the items price below what you paid.

Any inventory write-down must be reflected as an expense on your income statement.

Therefore, if the value of inventory declines, your company incurs a financial loss.

C.Penneys latest struggles: rebranding, loss of consumer interest, declining stock value, and shoplifting are evidence of poor inventory analysis and management.

Former Chief executive officer, Ron Johnsons rebranding effort caused a $1 billion dollar loss last year, and has caused long term ripple effects, mainly, the need to liquidate inventory through extreme write downs.

For instance, a pair of Izod trousers sold for just $1.97 an inventory write down of roughly 95%.

The Health Sciences Learning Center of Pensacola Junior College was losing money due to their inefficient inventory management.

They were tracking some 5,000 items using Microsoft Excel medical supplies spread out across dozens of cabinets and offices around campus.

Due to their poor inventory management, the program couldn’t accurately determine an appropriate fee when charging each of their one thousand students efficiently writing down the cost of supplies without even knowing.

By implementing Inventory Control, the center was able to reduce their stock of supplies by 65% and start to efficiently monitor its inventory and assign a precise tariff for the medical supplies students used during lab.

Even though you will take a hit whenever you write down inventory, write downs are preferable to write offs when it comes to big business.


The Difference Between Stock Write-Offs and Tax Deductions

A write off is the formal recognition that a part of a company’s inventory no longer has value.

A lot of companies prepare in advance for inventory losses due to write downs and write offs by creating an Inventory Reserve.

The recommended reserve is projected by calculating historical selling data and current market conditions.

This inventory reserve is accounted for as an expense on your company’s income statement.

If you have a company that owns a lot of computers for employees you can do the same thing.


In closing, this article is an overview to the question is a computer tax deductible for small business.


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